1. Types of Information systems
Transaction processing systems and Management information systems

2. Different Kinds of Systems
Four main types of IS serve four different organizational levels:
Operational-level systems
Management-level systems
Strategic-level systems

3. Operational level systems
To answer routine questions and track the flow of transactions through the organization. Therefore, information generally must be easily available, current, and accurate.
Supporting operational managers by keeping track of the elementary activities and transactions of the organization, such as sales, receipts, cash deposits, payroll, credit decisions, and the flow of materials in a factory

4. Management-level Systems
To serve the monitoring, controlling, decision-making, and administrative activities of middle managers
Typically providing periodic reports rather than instant information on operations
Including control systems for annual budgeting and inventory, and management systems for sales and human resources

5. Strategic-level systems
To match changes in the external environment with existing organizational capability
Helping senior management deal with and address strategic issues and long-term trends, both in the firm and in the external environment
Including a system to forecast sales trends over a five-year period or systems for profit planning and personnel planning

6. Major Types of systems Executive Support Systems (ESS)
Decision Support Systems (DSS)
Management Information Systems (MIS)
Transaction Processing Systems (TPS)

7. Transaction processing systems
Definition: A Transaction Processing System (TPS) is a type of information system that collects, stores, modifies and retrieves the data transactions of an enterprise.
– E.g. sales order entry, payroll, shipping
– For example McDonald's, which sells a large number of hamburgers every day, orders raw materials from its suppliers. Each time the company places an order with a supplier, a transaction occurs and a transaction system records relevant information, such as the supplier's name, address, and credit rating, the kind and quantity of items purchased, and the invoice amount.

8. Types of transactions Transactions can be internal or external.
When a department orders office supplies from the purchasing department, an internal transaction occurs
When a customer places an order for a product, an external transaction occurs.

9. Transaction processing systems are the data lifeline of the company
If a company fails to capture a transaction it may lead not only to customer dissatisfaction and lost profit but also to serious penalties and lawsuits.
TPS s become the source of data for other systems in the organization. If analyzed and integrated it will give business key information about new company plans. A better plan how to meet customer needs and preferences.
TPS is a link between the organization and external entities, such as suppliers, customers & distributors.

10. Batch processing
Transactions are accumulated over time and processed identically.
Batch processing may be done on a daily, weekly, or monthly basis or any other time period appropriate to the application.
For example, a company may process the travel expenses of its employees on a monthly basis

11. Real time processing
The immediate processing of data with the database updated as the transaction is being carried out.
An example may be the Bank ATM and POS terminal, both of which have user input which requires immediate feedback.

12. Characteristics of a transaction processing system
Records internal and external transactions that take place in a company
Is used mostly by lower-level managers to make operational decisions
Stores data that are frequently accessed by other systems
Is ideal for routine, repetitive tasks
Records transactions in batch mode or on-line
Requires six steps to process a transaction—data entry, validation, data processing, storage, output generation, and query support

13. TPS payroll system

14. Management Information Systems
Serve middle management
Provide reports on firm’s current performance, based on data from TPS
Provide answers to routine questions with predefined procedure for answering them
Typically have little analytic capability

15. Management Information Systems
An MIS provides managers with information and support for effective decision making, and provides feedback on daily operations.
MIS provides information to the users in the form of reports
Output, or reports, are usually generated through accumulation of transaction processing data.
Example: Annual budgeting

16. Management Information Systems
Transaction Processing Systems (TPS)
Support operation
Management and control
Routine, normal operations
Structured decisions
Management Information Systems (MIS)
Provide decision-making support for routine, structured decisions
Closely linked to and fed by TPS
Structured and Semi-structured decisions

17. Structured decisions
Structured decisions are those which are made according to specified procedures of rules or structured decisions are those that are easily made from a given set of inputs.
Deciding to send a reminder notice to a customer for an overdue balance is considered to be structured decision

18. Semi-structured decisions
Semi-structured decisions are those for which information obtained from a computer system or information system is only a portion of the total knowledge needed to make decision.
Advertise a new product or how much to spend on MIS.

19. Unstructured decisions
Unstructured decisions are novel, and insignificant.
There is no cut and dried  method for handling the problem because it hasn't arisen before or because it's precise nature and structure are mysterious or complex, or because it so important' that it deserves a custom tailored treatment.
These, types of decisions often , involve a high degree of freedom.
They may require a lot of creativity and intuitions from the decision maker to tell what factors will come into play in an unstructured play.

20. MIS systems obtain data from TPS systems

21. MIS report

22. MIS report types Scheduled reports Key-indicator reports
Exception reports
Ad hoc (demand) reports
Drill-down reports

23. Scheduled reports
Produced periodically, or on a schedule (daily, weekly, monthly

24. Key-Indicator report
Summarizes the previous day’s critical activities and typically available at the beginning of each day.

25. Demand and exception reports
Gives certain information at a manager’s request.
Automatically produced when a situation is unusual or requires management action

26. Drill Down Reports
Provide detailed data about a situation.

27. Management Management is decision making
The manager is a decision maker
Organizations are filled with decision makers at different level.
Management is considered as art: a talent acquired over years by trial-and-error.
However decision making today is becoming more complicated:
Technology / Information/Computers : increasing More alternative to choose
Structural Complexity / Competition : increasing larger cost of error
International markets / Consumerism : increasing more uncertainty about future
Changes, Fluctuations : increasing need for quick decision

28. Management problems
Most management problems for which decisions are sought can be represented by three standard elements – objectives, decision variables, and constraints. These problems can be structured, semi-structured and unstructured in nature:
Objective
Maximize profit
Provide earliest entry into market
Minimize employee discomfort/turnover
Decision variables
Determine what price to use
Determine length of time tests should be run on a new product/service
Determine the responsibilities to assign to each worker
Constraints
Can’t charge below cost
Test enough to meet minimum safety regulations
Ensure responsibilities are at most shared by two workers

29. Information Systems to support decisions
Management Information Systems
Decision Support Systems
Decision support provided
Provide information about the performance of the organization
Provide information and techniques to analyze specific problems
Information form and frequency
Periodic, exception, demand, and push reports and responses
Interactive inquiries and responses
Information format
Prespecified, fixed format
Ad hoc, flexible, and adaptable format
Information processing methodology
Information produced by extraction and manipulation of business data
Information produced by analytical modeling of business data

30. Decision support systems
A Decision Support System (DSS) is an interactive computer-based system or subsystem intended to help decision makers use communications technologies, data, documents, knowledge and/or models to identify and solve problems, complete decision process tasks, and make decisions.
Decision Support System is a general term for any computer application that enhances a person or group’s ability to make decisions; can be as simple as an excel spread sheet to a complicated system involving large databases, statictical modelling techniques and applying A.I. to dervive information.

31. Question
Explain the difference between a structured, semi-structured and unstructured decision.
(6 marks)
Describe, using suitable examples the parts played by both a transaction processing system (T.P.S.) and an Management information system (M.I.S. in the generation of information required for strategic level decision making
(24 marks)